Compliance Guide
Maryland Wholesaling Compliance
A practical overview of the laws, disclosures, and best practices that govern real estate wholesaling in Maryland — including HB 124/Chapter 508, seller rescission rights, end buyer deposit protections, and what it all means for your deals.
Not legal advice. Flat Rate Wholesale is not a law firm and does not provide legal services. This content is for informational purposes only and should not be relied upon as legal advice. Laws and regulations change frequently. Consult a licensed real estate attorney in your state and contact your local regulatory agency for guidance specific to your transactions.
Is Wholesaling Legal in Maryland?
Yes. Maryland permits real estate wholesaling — the practice of entering into a purchase contract and assigning that contract to an end buyer for a fee. What changed on October 1, 2025, is the level of disclosure and consumer protection now required in these transactions.
House Bill 124 (Chapter 508), along with its companion bill Senate Bill 160 (Chapter 509), established disclosure requirements and rescission rights for wholesale real estate transactions involving residential property. The bills were signed by Governor Wes Moore and took effect on October 1, 2025.
HB 124 did not ban wholesaling. It created a transparency framework that protects sellers from entering contracts without understanding the buyer's intent to assign, and protects end buyers from purchasing assignments without understanding the wholesale seller's actual position. Wholesalers who operate transparently and follow the disclosure requirements can continue operating legally.
The law applies prospectively only — it does not affect contracts executed before October 1, 2025.
What Is HB 124?
House Bill 124, enacted as Chapter 508 of the 2025 Maryland Laws, is titled "Residential Property — Assignment of Contracts of Sale — Disclosure Requirements and Rescission." The companion bill, SB 160 (Chapter 509), contains identical provisions. The law took effect on October 1, 2025, and applies to all contracts of sale for residential property executed on or after that date.
The law creates two categories of wholesaler: the "wholesale buyer" (who contracts with the property owner) and the "wholesale seller" (who assigns the contract to an end buyer). It imposes disclosure obligations on both roles, and it gives sellers and end buyers remedies when disclosures are not provided.
Key Provisions
Written disclosure to the seller (pre-contract). Prior to entering into a contract of sale for residential property, the wholesale buyer must provide written disclosure to the property owner that the buyer may assign the contract of sale to another person. This must happen before the contract is signed — not after.
Written disclosure to the end buyer (pre-assignment). Prior to entering into the assignment, the wholesale seller must provide written disclosure to the prospective buyer (assignee) that the seller holds an equitable interest in the property and may not be able to convey title. The end buyer must understand the nature of the transaction before committing.
Seller rescission right. If the wholesale buyer fails to provide the required disclosure and assigns the contract, the property owner may rescind the contract of sale without penalty at any time prior to closing. This is the enforcement teeth of the law — the deal can unwind entirely if the seller was not properly informed.
End buyer deposit refund right. An assignee (end buyer) who was not properly disclosed to is entitled to a refund of any deposit paid in connection with the assignment. This protects end buyers from losing earnest money on transactions where they were misled about the wholesaler's position.
Residential property only. HB 124 applies to contracts of sale for residential property. Commercial properties, unimproved land, and other non-residential property types are not covered by this specific law. However, general real estate disclosure obligations and consumer protection statutes may still apply to non-residential transactions.
Prospective application only. The law applies only to contracts executed on or after October 1, 2025. It cannot be applied retroactively to contracts signed before the effective date.
Read the bill: The full text of HB 124/Chapter 508 is available at mgaleg.maryland.gov. The companion bill SB 160/Chapter 509 contains identical provisions.
Disclosure Requirements in Detail
HB 124 creates two distinct disclosure obligations, each with specific timing requirements. Understanding who must disclose what, and when, is the core of Maryland wholesaling compliance.
Wholesale Buyer → Seller
Who: The wholesale buyer (the person entering into the purchase contract with the property owner).
What: Written disclosure that the buyer may assign the contract of sale to another person.
When: Prior to entering into the contract of sale. This is a pre-contract requirement — the disclosure must be provided before the seller signs the purchase agreement.
Consequence of failure: If this disclosure is not provided and the contract is subsequently assigned, the property owner may rescind the contract without penalty at any time prior to closing.
Wholesale Seller → End Buyer
Who: The wholesale seller (the person assigning the contract to the end buyer).
What: Written disclosure that the seller holds an equitable interest in the property and may not be able to convey title to the property.
When: Prior to entering into the assignment agreement. The end buyer must understand the nature of the transaction before committing.
Consequence of failure: The assignee (end buyer) is entitled to a refund of any deposit paid in connection with the assignment.
Practical Implementation
The disclosures must be in writing. While HB 124 does not mandate a specific form, the language must clearly communicate the required information. As a best practice, include disclosure language in multiple locations:
- • In the purchase contract itself (assignment clause with disclosure to the seller)
- • In a separate standalone disclosure document signed by the seller before contract execution
- • In the assignment agreement provided to the end buyer
- • In marketing materials sent to potential buyers
Document when and how each disclosure was delivered. Retain signed acknowledgments from both the seller and the end buyer. If a dispute arises, your documentation is your defense.
Rescission Rights and Deposit Protections
HB 124's enforcement mechanism is built around two remedies: seller rescission and end buyer deposit refunds. Both are triggered by failure to provide the required disclosures. These are not theoretical risks — they are practical consequences that can unwind a deal entirely.
Seller Rescission
If the wholesale buyer fails to disclose their intent to assign and subsequently does assign the contract, the property owner can rescind the contract of sale without penalty at any time before closing. This means the seller can walk away from the deal — no damages owed, no breach — if they were not informed about the assignment. This right exists from the moment of the undisclosed assignment until the closing table.
End Buyer Deposit Refund
An assignee (end buyer) who was not properly informed that the wholesale seller holds only equitable interest is entitled to a refund of any deposit paid in connection with the assignment. This protects end buyers from losing earnest money or assignment fees on transactions where the wholesale seller misrepresented their position. If an end buyer paid a deposit and later discovers the seller did not own the property and did not disclose that fact, the deposit comes back.
The practical impact: These remedies mean that a single missed disclosure can kill a deal at any point before closing. The seller can walk away penalty-free, and the end buyer can reclaim their deposit. For wholesalers, this makes compliance non-negotiable — the risk of deal failure from a missed disclosure far exceeds the minimal effort of providing one.
Assignment vs Double Close in Maryland
Both assignment and double closing are valid transaction structures in Maryland. HB 124 specifically addresses the assignment of contracts of sale, which means the disclosure and rescission provisions are aimed squarely at assignment transactions.
Assignment
You assign your purchase contract to the end buyer. One closing occurs. Your assignment fee is paid from proceeds. HB 124 disclosure requirements apply in full, and the seller's rescission right and end buyer's deposit refund right are both in play.
- + One set of closing costs
- + Faster and simpler to execute
- + No transactional funding required
- → Must comply with HB 124 disclosure requirements
- → Seller can rescind if disclosure is missed
- → Fee visible on settlement statement
Double Close
You close on the property first (A-to-B), take title, then sell to the end buyer (B-to-C). You own the property between the two transactions. Because you hold title at the time of the second sale, you are not assigning contract rights.
- + You own the property at time of second sale
- + Standard sale rules apply to B-to-C
- − Two sets of closing costs (~3% additional)
- − May require transactional funding
- − Often used to conceal the spread from both parties
Important timing distinction: The compliance advantage of a double close only applies if you market the property after taking title. In a simultaneous close — where you market while still under contract to purchase — you hold equitable interest only, the same legal position as an assignment. Your disclosure obligations at the time of marketing may be identical regardless of your intended closing structure. Oklahoma's SB 1075 (effective November 2025) explicitly includes simultaneous double closings in its wholesaling definition. The trend is toward closing this perceived loophole. Structure your compliance around what you hold at the time you market, not what you plan to hold at closing.
How We Handle It
How Flat Rate Wholesale Handles Maryland Compliance
Compliance is built into our disposition process. When you submit a Maryland deal, here is what we work to include as part of every transaction.
HB 124 Disclosures Included
Our process includes the required HB 124 disclosures in Maryland deal packages. We work to include disclosure language in the purchase contract, in a standalone disclosure document for the seller, and in the assignment agreement for the end buyer, so you do not need to draft these yourself.
Pre-Contract Seller Disclosure
We work to ensure the seller receives written disclosure of the potential assignment before the purchase contract is executed. This pre-contract timing requirement is critical — providing the disclosure after the contract is signed does not satisfy HB 124 and preserves the seller's rescission right.
End Buyer Equitable Interest Disclosure
Our assignment agreements include clear written disclosure that the wholesale seller holds equitable interest and may not be able to convey title. This protects the end buyer and eliminates any ambiguity about the nature of the transaction, satisfying HB 124's buyer-side disclosure requirement.
Disclosure Delivery Tracking
We track when disclosures are delivered to both the seller and the buyer, creating a documented paper trail. Given that HB 124's rescission right exists until closing, maintaining proof of disclosure delivery is essential protection against last-minute deal-killing rescission claims.
Double Close Coordination When Needed
For deals where a double close makes more sense — whether due to contract restrictions, title company requirements, or deal structure — we coordinate both closings with full transparency to the deal source. You see both sides of the transaction, both closing statements, and every dollar that changes hands.
Why this matters for deal sources: Maryland's rescission and deposit refund provisions mean that a single missed disclosure can kill a deal at any point before closing. When you work with a disposition partner that handles compliance correctly, you eliminate this risk. The disclosures get delivered, the documentation gets filed, and the deal does not collapse because someone forgot a piece of paper.
Common Questions
Maryland Wholesaling Compliance FAQ
Do I need a real estate license to wholesale in Maryland?
Maryland does not require a real estate license to assign your own purchase contract. You are acting as a principal in the transaction. However, HB 124 requires specific written disclosures from both the wholesale buyer (to the seller) and the wholesale seller (to the end buyer). If your marketing consistently advertises properties rather than contract positions, you may be crossing into activity that requires a license. The Maryland Real Estate Commission oversees licensing, and operating transparently within the HB 124 framework is the safest approach.
What exactly must be disclosed to the seller?
Prior to entering into a contract of sale, the wholesale buyer must provide written disclosure to the property owner that the buyer may assign the contract of sale to another person. The seller must understand before signing that the buyer may not be the party who ultimately closes on the property. This is a pre-contract requirement — it must be provided before the contract is executed, not after.
What must be disclosed to the end buyer?
Prior to entering into the assignment, the wholesale seller must provide written disclosure to the prospective buyer (assignee) that the seller holds an equitable interest in the property and may not be able to convey title to the property. The end buyer needs to understand they are purchasing contract rights from someone who does not own the property, not buying from the property owner directly.
Can the seller cancel the contract if disclosures are missing?
Yes. Under HB 124, if the wholesale buyer fails to provide the required disclosure and subsequently assigns the contract, the property owner may rescind the contract of sale without penalty at any time prior to closing. This is a powerful remedy — the deal can unwind entirely if the seller was not informed. Additionally, an assignee (end buyer) who was not properly disclosed to is entitled to a refund of any deposit paid in connection with the assignment. Both of these remedies create strong incentives for compliance.
Does HB 124 apply to double closings?
HB 124 specifically addresses the assignment of contracts of sale for residential property. In a double close, you take title at the first closing and sell property you own at the second closing. Because you hold title at the time of the second sale, you are not assigning contract rights. However, if you market the property before taking title, you are in the same legal position as an assignor. The disclosure obligations are based on what you hold at the time of marketing, not what you plan to hold at closing.
Have a Maryland Deal? We Handle the Compliance.
Submit your deal and let us handle the disclosures, documentation, and delivery tracking. You focus on finding deals — we make sure everything meets HB 124 standards so no deal falls apart over a missing disclosure.